Among the many aspects of commercial law, shareholder litigation is a common piece. Many corporations have shareholders, or people who have purchased and own a particular share of the company. These shareholders have rights, and if those rights are violated, they have the right to file a lawsuit against the corporation.
Whether you’re a shareholder looking to file a lawsuit or a corporation facing a lawsuit, the Houston commercial litigation lawyers of Feldman & Feldman have the experience necessary to ensure your rights are protected.
The shareholders of a corporation in Houston and the state of Texas have specific legal rights. The governing bodies of corporations are required to disclose certain types of information to shareholders and uphold financial responsibilities. Shareholders have the right to:
- Examine the corporation’s books and records. The following information is required to be made available to all shareholders who have owned stock in the corporation for at least six months or who own 50% or more of the outstanding stock:
- The basic accounting records.
- The minutes of all meetings of shareholders, directors, or official committees.
- The current list of the names and addresses of all shareholders.
- Any other records the corporation is required by law to keep.
- Attend annual shareholder meetings. A shareholder can insist that an annual shareholder meeting be held. This is often overlooked when most of the shareholders are also party of the governing body of the company that controls the daily operations. But any shareholder can submit a written request for an annual meeting to be scheduled.
- Insist that the corporation register shares in the shareholder’s name. Shares of the company should be issued and registered in the name of each individual shareholder. This ensures the shareholder has legal proof of ownership with which to demand their rights in legal matters.
- Receive the shareholder’s rightful share of the profits. Dividends must be paid to shareholders proportionate to the percentage owned. The only exception is when there are different classes of stock, such as preferred stock and/or common stock.
- Force the distribution of dividends. Sometimes the director or governing body decides that it is in the company’s best interest not to distribute profits. However, if this is decided in bad faith or as a malicious attempt to withhold profits, a shareholder has the right to file a lawsuit in order to force the distribution of dividends.
- Participate in corporate expansion through ownership of shares. When a successful corporation expands and takes advantage of new opportunities, shareholders have the right to participate in the expansion.
- File a lawsuit against the corporation for violation of shareholder rights. If any of the above rights are violated, a shareholder has the right to file a lawsuit against the corporation.
Get the Help of a Houston Commercial Litigation Lawyer
Are you a shareholder who believes your rights have been violated? Is your corporation facing a lawsuit brought against you by a shareholder? The Houston commercial litigation lawyers of Feldman & Feldman are prepared to fight for your rights. Our extensive experience in business law qualifies us to represent either side in a shareholder lawsuit.